Wall Street a trap for outsiders, says Madoff

He should know; he pulled history's largest Ponzi scheme

MarketWatch has interviewed Bernard Madoff, the architect of history's biggest Ponzi scheme, in prison. (He is serving 150 years.) "The individual investor is the last person that has any information," said Madoff in the interview. The Securities and Exchange Commission doesn't have the money to hire the right people. Hedge funds are a danger and should be regulated. Brokerages and advisers should have independent custodians, "and the government should have forced me to have an independent custodian" to be in control of the funds, Madoff said. If the money entrusted to him would have been with an independent custodian, he would have been caught long ago, he said.

The same was true with a San Diego-based Ponzi scheme run by J. David Dominelli in the 1980s. Investors gave him the money. He and his then-girlfriend and co-conspirator, then named Nancy Hoover, spent the money on themselves. If the money would have gone to an independent custodian, J. David would have been caught earlier.

Comments

Murphyjunk: Madoff also mentioned the revolving door, by which Wall Street law firms control the Securities and Exchange Commission. He didn't use the name "revolving door," but said working at the agency was just a stepping stone to get a posh job with a white show law firm. Best, Don Bauder